Subdivisions and other large developments are typically required to mitigate their traffic impacts, but Missoula County’s recent growth adds up, said Shane Stack, the county’s public works director.

“All of these developments have an aggregate impact on our infrastructure,” he said. “It’s not just one that’s going to make a difference. All of them combined and the growth we’re seeing combined adds pressure on our infrastructure and the staff that has to manage that infrastructure.”

While growth increases tax revenue, that revenue does not keep up with the costs of expanding services, said Missoula County Commissioner Josh Slotnick.

“New growth costs everybody money,” he said.

If a housing or commercial project generates enough traffic to require improvements such as turn lanes or stoplights, developers typically pay for that work, MDT’s Boucher said. However, the farther from the development, the grayer the line defining who pays for what, he said.

The state transportation department evaluates projects to determine what improvements to its roads may be necessary, but the agency does not guide nor block development, Boucher said.

“We want to make sure the way it impacts the system serves everyone as best and as safely as possible,” he said.

A recent example of a developer-funded infrastructure improvement is a new stoplight at the intersection of U.S. Highway 93 and Rose Crossing north of Kalispell, Boucher said. Multiple developers paid to install the stoplight last spring, as large commercial and housing projects moved forward on Rose Crossing, KPAX reported at the time.

Anticipated development at the Wye west of Missoula could lead to a mix of county- and developer-funded infrastructure improvements over the next several decades, Commissioner Slotnick said.

The county is crafting an infrastructure plan for the rapidly developing area, which could support an estimated 10,000 to 15,000 homes built over the next 50 to 70 years, according to an infrastructure needs assessment published in November.

Slotnick emphasized that the projected growth would not happen all at once and that the pace would be determined by landowners and developers. The county is working to fill gaps identified in the needs study, including roads, water, sewer and stormwater infrastructure.

To help pay for the work and catalyze private development, in 2020 and 2023, Missoula County implemented two targeted economic development districts around the Wye to allow the collection of tax increment revenue, Slotnick said. As improvements are made in the district and property taxes go up, the difference in tax revenue is collected in a fund for further investment in the district.

The county is applying for a $40 million bond from the Montana Board of Investments to fund the improvements up front and will use the tax increment revenue to pay it back, Slotnick said. Under a new state program, half the bond will get an interest rate at 25% of the market rate, which is a “spectacular” deal, he said.

Starting in July, the county can also collect impact fees on new developments to support government services, public safety and emergency management, according to its website.

These funding sources can only be used for specific projects or areas, leaving the county short on resources to cover general road maintenance, Slotnick said. To people who ask why the county plans to build new roads when it can’t keep up with maintenance, Slotnick said the infrastructure is necessary to address the housing shortage.

Although population growth rates ticked down last year, Missoula, Flathead and Ravalli counties saw jumps in the COVID-19 pandemic era, according to U.S. census data.

“ADTs (average daily trips) are through the roof in Missoula, Kalispell,” said Boucher with MDT. “In this district, the amount of people moving here and cars on the roads are huge.”

The increased traffic, along with Montana’s harsh weather, puts more wear and tear on roads, Boucher said. Many of the state’s bridges are nearing the end of their design life, contributing to the “perfect storm” for the transportation agency, he said.

Statewide, the needs increase every year as infrastructure ages, with about $400 million worth of projects in the Missoula district the agency can’t address, Boucher said. Inflation has driven costs up across the board, he said.

Boucher said determining what projects move forward includes figuring out the schedule and how to best serve the public while keeping good roads in good condition. But the biggest constraint is the budget.

The state receives money from the federal government that provides, on average, 87% of funding for projects, Boucher said. MDT’s matching 13% comes from the state, including gas tax revenue and money allocated by the Legislature, he said.

In 2023, bills that provided $100 million for local government road maintenance and put $100 million into a highway construction fund to match federal grants were “a huge win,” Boucher said.

The agency will continue working with local governments and the state to secure more funding, but nobody wants to pay more taxes, Boucher said.

However, even when Missoula County voters passed a two-cent gas tax in 2020 to help pay for city and county road projects, the Legislature eliminated the option the following year. Losing half of the $1.2 million the tax would have raised annually was a big hit for Missoula County, said Stack, the public works director.

The tax was a way for Missoula’s approximately 2.5 million annual visitors to help pay their share of wear on the roads, Slotnick said. Local governments need new tools that include a way for non-residents driving on the roads to contribute, he said.

As it stands, the county can’t complete any large infrastructure projects without major federal grants, Slotnick said.

The county recently submitted applications for a $25 million and a $17 million grant, but finding enough money for the estimated local match of $3 million each will be a challenge, Stack said.

“I’m barely hanging on, getting by with the work we’re doing,” he said. “To throw in a requirement for that is not insurmountable, but we’ll have to get really creative on how to come up with those funds.”

The county is diverting more funding to help pay for roads and bridges, including $400,000 in tax revenue from local recreational cannabis sales, but that’s not enough to offset all the needs, Stack said. The department falls back on property tax revenue, which has limited annual increases that do not keep up with inflation, he said.

“We’re no different than the state, just on a smaller scale,” Stack said. “We don’t have the funding we need either to maintain our roads and bridges, so they’re slowly deteriorating. There’s not much we can do.”